Logo of Phnom Penh Post newspaper Phnom Penh Post - Employees’ seniority pay to be tax-free: GDT

Employees’ seniority pay to be tax-free: GDT

Content image - Phnom Penh Post
The General Department of Taxation. Post Staff

Employees’ seniority pay to be tax-free: GDT

The General Department of Taxation (GDT) on Thursday said back payments of seniority indemnity for Cambodian employees are tax exempt, while employers can also deduct the payments from their income taxes.

The GDT’s instruction circular, signed by Cambodian Minister of Economy and Finance Aun Pornmoniroth on April 11 and released on Thursday, also says that services in relation to recruiting, training, transporting and managing workers overseas by private agencies are exempt from value-added tax.

Ros Sokhom, managing director of auditing firm Rosoco Limited, on Thursday said the ministry’s circular clarifies conditions for employees who are set to receive the payment, as well as employers who will be paying, establishing that they are free from tax obligations.

“The benefit is going to be for Cambodian employees as they will receive the full amount of seniority payment without being required to pay tax,” he said.

Sokhom added that allowing the back payments of seniority indemnity to be deducted from employers’ current income taxes is a positive move as it reduces the company’s burden.

“The decision makes employees receive full benefits while it also reduces some of the burden for their employers,” he said.

Sokhom continued that it is too early to estimate how much revenue the government is set to lose from the tax exemption, but said it should not be excessive.

The Ministry of Labour and Vocational Training in September issued the prakas on seniority payment indemnity, instructing all employers to provide their employees with the security payments starting this year.

Seniority payments will be made twice per year, with the employer providing employees with a payment equal to 15 days per year of their wages, along with other benefits.

MOST VIEWED

  • 12th Cambodia int’l film festival to see return of Hollywood star

    Phnom Penh is set to come alive with the magic of cinema as the highly anticipated 12th Cambodia International Film Festival (CIFF) takes centre stage. Boasting an impressive line-up of 188 films from 23 countries, including captivating shorts, feature films, documentaries and animation, the festival promises an

  • Bareknuckle champion wants Kun Khmer fighter

    Dave Leduc, who is the current openweight Lethwei boxing champion in Myanmar, has announced that he will travel to Cambodia this year to challenge SEA Games gold medallist Prum Samnang any time that is convenient, after their planned match later this month in Slovakia was

  • Struggling Battambang artist dreams of staging full-scale gallery exhibition

    Leav Kimchhoth, a 55-year-old artist from Battambang province, is a familiar face to locals and tourists alike on the streets of the riverside in Phnom Penh. The one-armed painter and illustrator often hawks his work near the night market on weekends and public holidays. He

  • Five-year-old Hanuman dances his way into hearts of Cambodia

    A young talent from a new-established settlement has emerged, captivating the online world with his mesmerising performances of the traditional Cambodian monkey dance. Roeun Kakada is a five-year-old prodigy who has taken the social media sphere by storm with his exceptional dance skills and dedication

  • Fresh Covid warnings as Thai hospital fills

    A senior health official reminds the public to remain vigilant, as neighbouring countries experience an increase in Covid-19 cases, with the latest surge appearing to be a result of the Omicron XBB.1.5 sub-variant. Or Vandine, secretary of state and spokeswoman for the Ministry of Health,

  • New Law on Taxation comes into effect

    Cambodia has enacted the eagerly-awaited new Law on Taxation, which aims to improve the national tax regime’s compliance with present and future international standards and economic conditions; encourage accountability, effectiveness and transparency in the collection process; and promote investment in the Kingdom. King Norodom